How do I track mileage for my real estate business?
Real estate agents drive a lot. Between property showings, open houses, client meetings, and trips to title companies, the miles add up fast. That’s a significant tax deduction if you’re tracking properly. If you’re not tracking, you’re giving money away.
Use an app. MileIQ, Everlance, or similar apps run in the background and automatically detect trips. You swipe to classify them as business or personal. This takes seconds and captures mileage you’d otherwise forget. Paper logs work but require discipline most agents don’t have time for between showings and closings.
Log every trip immediately. Waiting until the end of the week or month means you forget trips or misremember details. The IRS requires date, destination, business purpose, and miles driven. An app captures all of this automatically. A spreadsheet works if you fill it in daily, but most agents find that habit hard to maintain.
Know what counts as business mileage. Driving from your home office to show a property is deductible. Driving between multiple showings is deductible. Meeting a client for coffee to discuss their home search is deductible. Driving to your brokerage office if that’s your regular workplace is commuting and not deductible. Driving from that office to a property showing is deductible.
The first trip of the day matters. If you work from home and your home is your principal place of business, your first trip to a property is deductible. If you go to your brokerage office first, the drive there is commuting. The drive from the office to the property is business. Structuring your day intentionally can affect what’s deductible.
Record the business purpose with enough detail to defend it later. “Client meeting” is weak. “Met with Johnson family to review offers on 1234 Elm Street” is defensible. You don’t need a novel, but you need enough that anyone reviewing your records understands why the trip was business-related. Real estate professionals face specific documentation standards because of how much driving the job requires.
At tax time, you’ll choose between the standard mileage rate or actual vehicle expenses. Most agents use the standard rate because it’s simpler and usually works out favorably. Either way, you need the mileage documentation. Without it, you can’t claim either method.
Real estate professionals often have 15,000 to 25,000 business miles per year. At the current standard rate, that’s $10,000 to $17,000 in potential deductions. Losing even a fraction of that because you didn’t track properly costs you real money on your tax bill. Your Nampa bookkeeping services provider should be reviewing your mileage records quarterly to make sure everything is documented correctly before tax season arrives.
The tracking system doesn’t need to be complicated. It needs to be consistent. Pick an app, use it every day, and review your records monthly to catch any trips you forgot to classify. Do that and you’ll capture every deductible mile you drive.
The Treasure Valley's Tax and Accounting Team
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